In the compliance and ethics field, In re Caremark International Incorporated Derivative Litigation is one of the few judicial decisions that professionals will know by name. In 1996, the Delaware Chancery Court’s Caremark decision was the first to recognize a director’s fiduciary duty to oversee a corporation’s compliance and ethics program, which instantly raised the visibility and urgency of compliance and ethics in the boardroom. And even though this duty was later confirmed by the Delaware Supreme Court in a case by another name, the compliance and ethics community still refers to the “Caremark duty” due to the original decision’s path-breaking analysis and impact.

Two decades later, we can ask where Caremark falls within the ongoing history of compliance and ethics. This article does so by describing the parallel evolutions of the Caremark duty and another compliance and ethics landmark – the 1991 United States Sentencing Guidelines for organizations that provided sentencing leniency for organizations with an effective compliance and ethics program.

These two histories converge at an important point that gives us the Caremark decision. That is, the 1991 Sentencing Guidelines influenced the 1996 Chancery Court decision to recognize the Caremark duty. Over the following twenty years, the histories then diverge: subsequent amendments to the Sentencing Guidelines develop a robust account of director responsibilities, while Delaware case law stalls, leaving the Caremark duty as largely symbolic.